If brokerage commissions on stocks fall,everything else held constant,the demand for bonds ________,the price of bonds ________,and the interest rate ________.
A)decreases;decreases;increases
B)decreases;decreases;decreases
C)increases;decreases;increases
D)increases;increases;increases

Question

Quizplus · Accepted Answer

When brokerage commissions on stocks fall, stocks become more attractive relative to bonds, leading to a decrease in demand for bonds. This decreased demand for bonds leads to a decrease in bond prices. As bond prices decrease, the interest rates, which move inversely to bond prices, increase.

If Brokerage Commissions on Stocks Fall,everything Else Held Constant,the Demand